II 109th CONGRESS 2d Session S. 2317 IN THE SENATE OF THE UNITED STATES February 16, 2006 Mr. Baucus (for himself, Mr. Hatch, and Ms. Stabenow) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Trade Act of 1974 to require the United States Trade Representative to identify trade enforcement priorities and to take action with respect to priority foreign country trade practices, and for other purposes.

1.

Short title

This Act may be cited as the Trade Competitiveness Act of 2006.

2.

Identification of trade enforcement priorities

(a)

In general

Title III of the Trade Act of 1974 (19 U.S.C. 2411 et seq.) is amended by adding at the end the following:

311.

Identification of trade enforcement priorities

(a)

Identification and annual report

(1)

In general

Within 75 days after the submission of the report required by section 181(b), the United States Trade Representative shall annually— (A)identify United States trade enforcement priorities; (B)identify enforcement actions that the Trade Representative has taken during the previous year and review the impact these enforcement actions have had in addressing foreign trade barriers; (C)identify priority foreign country trade practices on which the Trade Representative will focus its enforcement efforts; and (D)submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives and publish in the Federal Register a report on the priorities, actions, and practices identified in subparagraphs (A), (B), and (C). (2)

Factors To consider

In identifying priority foreign country trade practices under paragraph (1), the Trade Representative shall focus on those practices, the elimination of which is likely to have the most significant potential to increase United States economic growth, either directly or through the establishment of a beneficial precedent. The Trade Representative shall take into account all relevant factors, including— (A)the major barriers and trade distorting practices described in the most recent available National Trade Estimate Report required under section 181(b); (B)the findings and practices described in the most recent available report required under— (i)section 182; (ii)section 1377 of the Omnibus Trade and Competitiveness Act of 1988; (iii)section 3005 of the Omnibus Trade and Competitiveness Act of 1988; (iv)section 421 of the Act entitled An Act to authorize extension of nondiscriminatory treatment (normal trade relations treatment) to the People's Republic of China, and to establish a framework for relations between the United States and the People's Republic of China (22 U.S.C. 6951); and (v)any other report prepared by the Trade Representative or any other agency relating to international trade and investment; (C)the trade agreements to which a foreign country is a party and its compliance with those agreements; (D)the medium- and long-term implications of foreign government procurement plans; and (E)the international competitive position and export potential of United States products and services. (3)

Other items in report

The Trade Representative may include in the report a description of foreign country trade practices that may in the future warrant identification as a priority foreign country trade practice. (4)

Priorities not identified

If the Trade Representative does not identify a priority foreign country trade practice in the report required under paragraph (1), the Trade Representative shall set out in detail in that report the reasons for failing to do so. (b)

Consultation

(1)

In general

Not later than 45 days after the submission of the report required by section 181(b), the Trade Representative shall consult with the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives with respect to the priorities, actions, and practices to be identified in the report under subsection (a). (2)

Vote of committee

If, as a result of the consultations described in paragraph (1), either the Committee on Finance of the Senate or the Committee on Ways and Means of the House of Representatives requests identification of a priority foreign country trade practice by majority vote of either Committee, the Trade Representative shall include such identification in its annual report. (3)

Determination not to include priority foreign country trade practices

The Trade Representative may determine not to include the priority foreign country trade practice requested under paragraph (2) in its annual report only if the Trade Representative finds that— (A)such practice is already being addressed under provisions of United States trade law, under the Uruguay Round Agreements (as defined in section 2(7) of the Uruguay Round Agreements Act (19 U.S.C. 3501(7))), under any bilateral or regional trade agreement, or as part of trade negotiations with that foreign country or other countries, and progress is being made toward the elimination of such practice; or (B)identification of such practice as a priority foreign country trade practice would be contrary to the interests of United States trade policy. (4)

Reasons for determination

In the case of a determination made pursuant to paragraph (3), the Trade Representative shall set forth in detail the reasons for that determination in the report required under subsection (a)(1). (c)

Investigation and resolution

(1)

In general

Upon submission of the report required by subsection (a), the Trade Representative shall, with respect to any priority foreign country trade practice identified, seek satisfactory resolution with the country concerned under the auspices of the World Trade Organization, pursuant to a bilateral or regional trade agreement to which the United States is a party, or by any other means. A satisfactory resolution may include elimination of the practice or, if not feasible, providing for compensatory trade benefits. (2)

Consultations; investigations

Not later than 120 days after the transmission of the report required under subsection (a), the Trade Representative shall, with respect to any priority foreign country trade practice identified— (A)initiate dispute settlement consultations in the World Trade Organization; (B)initiate dispute settlement consultations under the applicable provisions of any bilateral or regional trade agreement to which the United States is a party; (C)initiate an investigation under section 302(b)(1) of this Act; (D)seek to negotiate an agreement that provides for the elimination of the priority foreign country trade practice or, if elimination of the practice is not feasible, an agreement that provides for compensatory trade benefits; or (E)take any additional action necessary to eliminate the priority foreign country trade practice. (3)

Report

On the day the Trade Representative takes action under subparagraph (E) of paragraph (2), the Trade Representative shall transmit to Congress a report describing the action and the reasons for taking the actions. If the Trade Representative takes action under subparagraph (E) of paragraph (2), the Trade Representative shall state in detail the reasons the Trade Representative did not take action under subparagraphs (A) through (D) of such paragraph. (d)

Additional reporting

The Trade Representative shall report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives every 6 months on the progress being made to realize the trade enforcement priorities identified in subsection (a)(1)(A) and the steps being taken to address the priority foreign country trade practices identified in subsection (a)(1)(C).

. (b)

Conforming amendment

The table of contents for the Trade Act of 1974 is amended by inserting after the item relating to section 310, the following new item: Sec. 311. Identification of trade enforcement priorities. .

3.

Establishment of position of Chief Trade Enforcement Officer

(a)

Establishment of position

Section 141(b)(2) of the Trade Act of 1974 (19 U.S.C. 2171(b)(2)) is amended to read as follows: (2)There shall be in the Office 3 Deputy United States Trade Representatives, 1 Chief Agricultural Negotiator, and 1 Chief Trade Enforcement Officer. The 3 Deputy United States Trade Representatives, the Chief Agricultural Negotiator, and the Chief Trade Enforcement Officer shall be appointed by the President, by and with the advice and consent of the Senate. As an exercise of the rulemaking of the Senate, any nomination of a Deputy United States Trade Representative, the Chief Agricultural Negotiator, or the Chief Trade Enforcement Officer submitted to the Senate for its advice and consent, and referred to a committee, shall be referred to the Committee on Finance. Each Deputy United States Trade Representative, the Chief Agricultural Negotiator, and the Chief Trade Enforcement Officer shall hold office at the pleasure of the President and shall have the rank of Ambassador. . (b)

Functions of position

Section 141(c) of the Trade Act of 1974 (19 U.S.C. 2171(c)) is amended by adding at the end the following new paragraph: (6)The principal function of the Chief Trade Enforcement Officer shall be to ensure that United States trading partners comply with trade agreements to which the United States is a party. The Chief Trade Enforcement Officer shall assist the United States Trade Representative in investigating and prosecuting disputes before the World Trade Organization, and pursuant to other trade agreements to which the United States is a party, and shall assist the United States Trade Representative in carrying out the Trade Representative's functions under subsection (d). The Chief Trade Enforcement Officer shall make recommendations with respect to the administration of United States trade laws relating to foreign government barriers to United States goods, services, intellectual property, government procurement, and other trade matters. The Chief Trade Enforcement Officer shall perform such other functions as the United States Trade Representative may direct. . (c)

Compensation

Section 5314 of title 5, United States Code, is amended by inserting Chief Trade Enforcement Officer as a new item after Negotiator.

4.

Trade Enforcement working group

(a)

Establishment

Not later than 90 days after the date of the enactment of this Act, the United States Trade Representative shall establish an interagency Trade Enforcement Working Group (in this section referred to as the Working Group) which shall be chaired by the Chief Trade Enforcement Officer of the Office of the United States Trade Representative. (b)

Membership

The Working Group shall include representatives from the Departments of Commerce, State Treasury, Agriculture, and such other departments and agencies as the United States Trade Representative considers appropriate. (c)

Responsibility

It shall be the responsibility of the Working Group to assist the Chief Trade Enforcement Officer in carrying out the principle functions described in section 141(c)(6) of the Trade Act of 1974.

5.

Sense of Congress regarding exchange rates and IMF reform

(a)

Findings

The Congress makes the following findings: (1)The global economy today is characterized by massive imbalances that risk substantial disruption to global economic growth. (2)The United States current account deficit is at the heart of these global economic imbalances, predicted to reach $800,000,000,000 in 2005. (3)A current account deficit of this size is unsustainable and threatens the global economy with disruption and recession. (4)Policies to manipulate exchange rates help drive global economic imbalances and the United States current account deficit. (5)Asian central banks appear to manipulate their currency through protracted, large-scale intervention in currency markets, largely concentrated in United States dollar assets. (6)The policies of Asian central banks keep Asian currencies from appreciating meaningfully against the dollar. (7)Protracted, large-scale intervention in international currency markets runs counter to Article IV, section 1, paragraph (iii) of the International Monetary Fund Articles of Agreement and the General Principles governing the Article as adopted by the International Monetary Fund Executive Board. (8)A principal function of the International Monetary Fund is to monitor exchange rate regimes and to act to prevent sustained currency market manipulation like that seen today in Asia. (9)The United States is the largest shareholder in the International Monetary Fund and is therefore best positioned to urge the International Monetary Fund to enforce its provisions on exchange rate policies. (10)The Department of the Treasury has to date not been successful in urging the International Monetary Fund to enforce Article IV, section 1, paragraph (iii) of the International Monetary Fund Articles of Agreement. (b)

Sense of the Congress

(1)

Exchange rate intervention

It is the sense of the Congress that— (A)the President should instruct the United States Executive Director to the International Monetary Fund to request the Managing Director of the Fund to use more aggressively the Fund's power to request consultations with any member country regarding that country's exchange rate policies. The purpose of the consultations is to determine, and recommend remedial action (if necessary), in a transparent manner— (i)the extent of a country's direct or indirect intervention in currency markets for purposes contrary to the Articles of Agreement of the International Monetary Fund; (ii)the effects of the intervention on the value of the currencies on member countries; and (iii)the effects of the interventions on international economic imbalances; and (B)the President should instruct the United States Executive Director to the International Monetary Fund to propose that the International Monetary Fund issue a semi-annual report on exchange rate policies that addresses all cases of large-scale intervention in international currency markets, determines the effect of these interventions on exchange rates, and proposes remedial action to curtail such practices. (2)

Reform of the international monetary fund

It is the sense of the Congress that the President should support efforts to reform the International Monetary Fund to facilitate greater vigilance over global exchange rates, and to ensure the governance structure of the International Monetary Fund represents the global economy, by instructing the United States Executive Director to the International Monetary Fund to— (A)lead a sustained and cooperative effort to reform the International Monetary Fund Executive Board to better represent large emerging economies, including those in Asia; (B)lead a sustained and cooperative effort to reform the weighted votes of Member States to better represent the significance of large emerging economies, including those in Asia; and (C)lead a comprehensive effort to review and improve the transparency of the International Monetary Fund, including publication of member country data and information related to exchange rate policies.

6.

Information and advice from private and public sectors

Section 135 of the Trade Act of 1974 (19 U.S.C. 2155) is amended— (1)in subsection (a)(1)— (A)by striking and at the end of subparagraph (B); (B)by striking the period at the end of subparagraph (C) and inserting ; and; and (C)by adding at the end the following: (D)preventing the loss of Federal and State sovereignty in the negotiation, implementation, and enforcement of a trade agreement. ; (2)in subsection (a)(2), by adding at the end the following: (E)The prevention of the loss of Federal and State sovereignty during the negotiation, implementation, and enforcement of trade agreements. ; (3)in subsection (e)(1), in the first sentence, by inserting before the end period the following: , including an assessment of the effect of the trade agreement on Federal and State sovereignty and the extent to which State and local governments were consulted in the negotiation of the free trade agreement; and (4)in subsection (e)(2), after United States, by inserting the following: , maintains Federal and State sovereignty,.

7.

Sense of Congress Regarding Sovereignty

(a)

Findings

The Congress makes the following findings: (1)America’s economic growth and prosperity is best served by embracing strategies to open fair global markets, investing in innovative research and technologies that create the industries and jobs, and engaging in, rather than being isolated from, the challenges of international competition in an increasingly interconnected world. (2)The overall negotiating objectives of our Nation in negotiating trade agreements and treaties includes economic growth, employment creation, sustainable development, and improvements to living standards and market opportunities. (3)Another primary responsibility of the United States Government is to ensure that Federal and State laws are not usurped by foreign governments or organizations. (4)A World Trade Organization (WTO) panel recently concluded that United States prohibitions on Internet gambling violate the United States commitments under the WTO. Specifically, the panel found that Federal and State gambling laws of the United States that prohibit companies located in Antigua and Barbuda from providing Internet gambling services to United States consumers conflict with international trade obligations under the General agreement on Trade in Services (GATS). (b)

Sense of Congress

It is the sense of the Congress that— (1)in addition to the overall trade negotiating objectives of the United States relating to economic growth, employment creation, sustainable development, and improvement to living standards and market opportunities, the United States policy should be to prevent the loss of Federal and State sovereignty in the negotiation, implementation, and enforcement of any trade agreement; and (2)laws that State and local governments have validly adopted, that are constitutional, and that reflect locally appropriate responses to the needs of State and local governments and residents, should not be overridden by provisions in trade agreements.

8.

Authorization of appropriations

There is authorized to be appropriate $5,000,000 to the United States Trade Representative to carry out the provisions of this Act.